Opposition to Carbon Storage in Netherlands May Foreshadow Problems for EU Expansion

BRUSSELS—The Dutch government’s recent failure to win public support for the onshore storage of sequestered carbon in the Netherlands is a trend that stakeholders expect to see repeated across the European Union, boosting the costs of some carbon capture and storage projects and threatening the future of others.

After residents and the municipal government of the southwest city of Barendrecht fiercely opposed plans to store carbon dioxide in depleted gas fields, the Dutch federal government abandoned the project and shifted its focus to a storage plan in the country’s northern provinces. But with similar signs of public opposition there, the government in February decided to shelve all plans for onshore storage and said it would pursue a demonstration project at sea.

The Dutch experience comes at a time when the European Union hopes to roll out a series of demonstration projects to test carbon capture and storage (CCS) technology whereby emissions will be captured at their source, liquefied, and stored permanently in geological vaults. Not only does the European Union want to be a world leader in the technology but it also needs the technology to meet its carbon emissions reduction targets for 2050.

Public acceptance (along with a healthy injection of money from the public purse) will be crucial to the successful rollout of the technology, since it is required for approvals for local storage sites, according to stakeholders. “The two main challenges in the deployment of CCS are financing and public acceptance,” Giles Dickson, Alstom Power’s vice president for government relations in Europe, told BNA.

Many analysts say that the lack of support for the industry-led CCS project in Barendrecht illustrates the need to engage local stakeholders from the start.

EU Needs Carbon Sequestration.

The European Union has pledged to reduce its greenhouse gas emissions by 80 percent to 95 percent from 1990 levels by 2050. According to the International Energy Agency’s Energy Technology Perspectives 2010 report, that will require a combination of increased energy efficiency and the commercial deployment of CCS.

So far, the European Union has assigned 1 billion euros ($1.4 billion) from the economic recovery plan it launched in the midst of the financial crisis in November 2008 to help pay for six carbon capture and storage projects. Further funding became available when the European Union agreed to set aside 300 million carbon allowances (worth about 5 billion euros, or about $7.1 billion at today’s carbon price) from the New Entrants’ Reserve of its post-2012 Emissions Trading Scheme (2003/87/EC) to support CCS and other low-carbon technologies.

Changing Regulatory, Policy Landscape.

The European Union’s CCS Directive (2009/31/EC) will be up for review in 2015, and it is widely expected that lawmakers will seek to mandate carbon sequestration for new power plants—requiring them to be “carbon capture ready.” The European Union also could introduce a greenhouse gas emissions limit for existing plants to give the technology an additional kick-start.

But the European Union has witnessed a slowdown in projects since the 27-nation bloc agreed to set up a string of demonstration projects in the 2009 CCS directive. Mark Johnston, a senior policy adviser at environmentalist group WWF, said this is “due to big macroeconomic factors like the global recession and the failure of Copenhagen,” the December 2009 U.N. climate change summit in the Danish capital that failed to reach an international consensus on several issues.

Europe now has to grapple with the issue of public acceptance and the fact that no single scenario to significantly reduce greenhouse gas emissions can exclude CCS.

A report published March 9 by the Global CCS Institute found that while more projects were moving forward in Europe than in other regions, activity was nevertheless slowing, with cancellations of some key projects such as the one in Barendrecht. According to the report, the United States has the largest number of newly identified large-scale integrated projects and continues to dominate CCS project activity.

Barendrecht: What Not to Do.

According to many observers, the case of Barendrecht has become an example of what not to do to win over the public.

One reason advanced by observers to explain the opposition of Barendrecht was that it was a densely populated region and already had hosted a batch of large infrastructure projects, including roads and shopping malls. But many analysts also said that not enough attention was paid to the interests of the local residents from the outset and that Barendrecht was seen as an industry-led project.

One analyst, who wished to remain anonymous, told BNA in a telephone interview: “Local stakeholders were not involved in the choice of Barendrecht. This was simply a decision between the central government and the project owners. No community would accept that it doesn’t have a voice in such matters.”

David Holyoake of ClientEarth, an organization of activist lawyers, said, “We see that the agenda has been driven by industry so it is a healthy response from the public to question the technology.”

The project was first announced in 2007 by the Anglo-Dutch energy company Shell. Keen to lower its carbon dioxide emissions so it would not have to buy as many carbon allowances under the European Union’s Emission Trading System, Shell said it would capture carbon from the hydrogen production plant at its oil refinery in Pernis in Rotterdam and would store it in depleted gas fields under the city of Barendrecht.

Shell planned to store a total of 10 million metric tons of carbon dioxide over a 25-year period (or 400,000 metric tons per year), making this a small-scale demonstration project. By contrast, PGE in Poland plans to store 2.1 million metric tons per year of emissions from its Belchatów plant, Europe’s largest coal-fired power station and largest emitter of carbon dioxide.

Locals Felt Powerless.

Before it was announced to the local government and the public, the Shell project in Barendrecht already had the backing of the federal government, which hoped such projects would help it meet its national greenhouse gas emissions target, imposed by EU law, and become a hub for CCS technologies. The Netherlands has plentiful storage sites by virtue of its large petrochemical industry. Depleted gas fields can provide the geological vault necessary for the permanent storage of the gas.

But by 2009, residents had formed a protest group, “CO₂ is NEE” (CO₂ is No), the local government had rejected the project, and a meeting between the federal government and the local community was “continuously interrupted by many boos, whistles, cries of disapproval and insults,” according to the report What Happened in Barendrecht? by the Energy Research Center of the Netherlands (ECN).

Further irking the local government, the national Parliament passed a law in March 2010 that transferred to the federal government the decisionmaking power for infrastructure projects with a national interest. The Crisis and Economic Reform Law (Crisis en Herstelt Law), the Dutch response to the economic crisis, effectively restricted the ability of local authorities to appeal against federal decisions on such projects. The ECN report said the national government had a “limited” presence at meetings with the local community, creating a sense that this was “Shell versus the public.”

After announcing in November 2010 it would halt the Barendrecht project, the Dutch government spent a relatively short period of time trying to win over local authorities in the northern provinces of Drenthe, Friesland, and Groningen. Minister of Economic Affairs, Agriculture, and Innovation Maxime Verhagen gave up the plan after just a few meetings.

Jan van Diepen, a spokesman for the minister, told BNA in a telephone interview: “The minister concluded that onshore storage was not absolutely necessary. He also decided that the final outcome was already clear and that he wasn’t going to go through the motions. This was mainly from the signs from the North during a couple of meetings.”

Opposition Not Limited to Netherlands.

The Netherlands is not unique in its opposition to onshore carbon dioxide storage. There are signs of similar opposition in Poland—over the Belchatów project—and in Germany.

In Poland, the plan is to store the carbon dioxide onshore, similar to the Dutch government’s initial plans.

The Polish Geological Institute has been investigating three possible structures in which to store the gas before identifying a site. However, Marek Jarosiñski, geological mapping director at the institute and head of the project, told BNA in an e-mail that even in the early stages, public opposition forced the institute to narrow down its search. “We have to abandon a structure because of the protest of landowners. Their argumentation was incredible and emotional,” he said. “Nobody in the local community is convinced that his peace and quiet should be sacrificed in the fight against global climate change. They are very receptive to emotional and catastrophic messages.”

In Germany, energy company RWE had planned to capture carbon at its plant in Cologne and then ship it to the North Sea island resort of Sylt. But the idea was fiercely opposed by locals who, proud of their island’s reputation as a high-class tourist destination, feared that hosting a carbon storage site would devalue their elevated property prices.

Eivind Hoff, with the environmental group Bellona, which supports CCS as an alternative to nuclear, told BNA in a telephone interview that RWE “drew up a plan with an unnecessarily long transport route to a storage site in a beautiful area where there’s never been any oil drilling or other mineral extraction, where tourism is big and property prices high. It was a predictable public relations disaster.”

Total Wins Over Residents.

Meanwhile, in the French region of Lacq, just north of the Pyrenees, French company Total scored a success with the local residents, persuading them of the virtues of carbon storage.

Its pilot project to demonstrate the whole chain of CCS has been in operation since 2009. The initial goal of the project is to capture and store 120,000 metric tons of carbon over a two-year period.

Observers attribute Total’s success in the fight for public acceptance to its comprehensive communication strategy. The company gave local residents details on the project’s role in the overall fight against climate change; a balanced analysis of the environmental risks, including leakages; and the benefits and jobs that it could bring to the local community, including what it called the socioeconomic “spin-off” in terms of work for local firms.

“The Total project in Lacq has been capturing and injecting CO₂ since August 2009. Why is the public so supportive? Because Total took public engagement very seriously from the beginning and engaged the municipal authorities and local population very closely and assured people that it is was worth doing,” said Dickson of Alstom, which provides technology to the Lacq facility.

Observers also noted that the region’s economy is highly dependent on the petrochemical industry and that the local familiarity with such technologies helped Total to convince residents that carbon storage is at least as safe, if not safer, than the storage of natural gas.

Eric Drosin, director of communications at the Zero Emission Platform (ZEP), a Brussels-based stakeholder group for the technology, said: “In the case of Total, one factor was the length of time the company spent making sure people felt comfortable with the project. The locals had also seen natural gas pumped there for years so it was nothing exceptional.”

Lessons to Be Learned.

While an important consideration for CCS project owner is location, involving local authorities also is crucial.

In the case of Barendrecht, the city is densely populated with a lot of young families. In Sylt, local residents had so far lived a life that was very remote from the petrochemical industry. But Barendrecht, like Lacq, is close to an industrial district—known as Rijnmond—that hosts a series of refineries. Thus locals’ familiarity with the industry is not enough.

Experts say project owners should look beyond what they need to do from a regulatory point of view to get a permit from local authorities. “What you often find with developers is that they neglect the power of sending a risk management study to the local authorities and just do the minimum required by the legislation,” Wim Vandenberghe of the Dechert law firm in Brussels told BNA.

Project developers, and the central governments that back them, also should consider how to get local stakeholders on board and present their project with the backing of nongovernmental organizations and other independent observers who may be better placed to convince the local population.

Public Questioned Shell Credibility.

In its report on Barendrecht, ECN said the public did not believe Shell’s claim that the project was not profitable and that it was not just about money. The authors said the local population reacted positively to visits made by the federal environment ministry to discuss the issues face to face. Residents wanted more information about the level of environmental risk, such as the chance of leakage.

Dickson of Alstom said: “These issues are real, and the onus is on the operator to address them effectively with the local population. Is it for industry to take the lead? Industry has a role to play. But it is important to have other stakeholders on board and involved in engaging the public, for example nongovernmental organizations.”

According to Drosin of ZEP, having other stakeholders on board is necessary since the technology, which gives coal a future while Europe is trying to increase the use of more sustainable energy sources such as wind and solar, can be a hard sell.

“CCS has always been the ugly duckling of the energy technology industry. Many people see it as a throwback to the past and people can’t see it as part of the future. Public desire for public discussion must be met and CCS needs to be explained by people who are impartial and objective,” Drosin said.

The experience in Barendrecht also showed the importance of government’s role and the need for transparency, Bellona Chairman Paal Frisvold said in a telephone interview. “Governments must ensure there is one door and that it is clear where to go so there is not a multi-layered system of confusion. There has to be complete transparency. Look at Barendrecht. They came in and presented the final plan. There should be no secrets. We must also engage with society,” Frisvold said.

As in the case of Lacq, developers also should offer clear incentives to local communities.

“In my mind, there is one effective argument—financial compensation,” Jarosiñski with the Polish Geological Institute said. “If there is an argument of extra incomes, the same people susceptible to negative arguments start to be open to positive ones.”

Hoff from Bellona added that regulators also could consider taxes on the project operator that would directly benefit municipal coffers or even a fee that would go to the municipality for every ton of carbon stored.

High Cost to Move Projects Offshore.

Experts were divided about the effect public opposition could have on the future of CCS projects and whether pushing carbon storage offshore could pose irresolvable logistical problems and prohibitive costs. Much depends on the proximity of the power plant to the coast and the cost of transporting the gas to be stored.

In the case of the Netherlands, a small country on the North Sea coast, the fact that offshore is a relatively easy option was one reason the government abandoned the debate with local populations for onshore CCS. As for the potentially higher costs of undersea storage, Van Diepen, spokesman for the Economic Affairs Ministry, said the ministry was looking into the cost issue, but that CCS was still an option and remained a priority for the government.

The situation is not so easy in Poland, and failure to win over a reluctant public could jeopardize an entire project.

“For some countries it [offshore CCS] seems to be a realistic solution. For Poland it is not due to the lack of good structures offshore and lack of big emitters in the north, close to the sea,” Jarosiñski said.

But even for projects that are possible offshore, developers still could face protests from local residents opposed to the construction of pipelines or even the use of existing ones to pump the captured gas to its destination. The further carbon has to go by land, the more likely it is that a developer will encounter opposition.

Alstom’s Dickson said: “Even if a project uses offshore storage, you still need to think about public acceptance. Especially if you’re transporting the CO₂ to the coast from an installation that is inland.”

But several stakeholders played down the cost issue, including Dickson, who said, “The costs of offshore storage do not differ greatly form the costs of onshore storage.”

Hoff from Bellona and Johnston from WWF pointed out that storage accounts for only 10 percent to 20 percent of an entire CCS demonstration project’s costs and that removing an onshore storage site would not necessarily put a stop to a project because of the additional cost.

There also is the question of whether it is necessary to pursue onshore storage for early demonstration projects, particularly in regions like Barendrecht. “We need to develop onshore storage but it is not essential to do that in the most densely populated areas for the first demonstration projects,” Hoff said.

Drosin at ZEP, however, said the European Union needs to cover all options for developing the technology and concluded that the costs would inevitably be higher with storage at sea. “We have to redouble our efforts and make sure we implement what we learned from Barendrecht. If CCS gets pushed offshore, then costs will go dramatically up. We need to validate all the options, including onshore. You just can’t get around that one,” he said.